In 2008, Cedric and Renee Flowers purchased a plot of land and asked Ricky and Jennifer Scott to build a house for them on the property. The Flower’s were unable to get financing, so they quit claimed the property to the Scotts, who then obtained a construction loan under their own names, using the property as collateral. The property was to be conveyed back to the Flowers after the house was built. The Scotts eventually defaulted on the loan amid disputes with the Flower’s and a lawsuit resulted over the property.
In April 2012, Cedric applied for and was issued a homeowners policy by State Farm. On July 17, 2012, a fire damaged the home and the contents. After discovering the Flower’s were not the actual owners of the home, State Farm denied the claim and sought a declaration that the policy was void ab initio.
Here, there is no dispute that contrary to the information contained in the policy application, Cedric Flowers did not own the insured property. Nor do they dispute that ownership was material to State Farm’s decision to issue the policy. Instead, the Flowers insist that there is no evidence that Cedric willfully misrepresented that he was the property’s owner and argued there was a genuine question of fact as to whether Cedric actually told the agent that took his application that he owned the property.
The Court relied on deposition testimony of Cedric in which he claimed that he does not remember the questions asked by the State Farm employee and that the meeting was not long enough to be asked may questions, suggesting instead that it was the State Farm agent who negligently assumed that Cedric owned the insured property.
However, as the Court noted, in both his answer to State Farm’s compliant and his response to State Farm’s request for admission, Cedric admitted telling the agent who took his insurance application that he was the owner of the property and to stating as much in his application. The district court concluded that these facts were judicially admitted, and therefore rejected the Flower’s argument as an impermissible attempt to create a dispute around a material fact already admitted. And here is what is key …
Although the Flower’s continue to point to Cedric Flower’s deposition testimony and insist that there is a genuine issue of fact as to whether he stated in his application that he owned the property, they do not attempt to address the district court’s finding that he judicially admitted facts to the contrary.